The ease of streaming a show on Netflix or listening to a new song on Spotify has become an integrated activity in the everyday lives of South Africans. After all, it is so much easier to log on to stream content instead of downloading it.

The Parliamentary Budget Office (PBO) has noted the increase in the country’s use of streaming platforms, and has published a new brief that explores the tax policy for South Africa’s digital economy.

The PBO is tasked with providing professional, independent advice and analysis to Parliament on budgets and other money-related bills.

“Given that South African corporate tax revenue as a share of revenue has declined over the years, and that more businesses have become more digitalised, it is necessary to consider taxation measures that enable revenue to be raised from digital economic activities income,” the PBO said.

The PBO has suggested digital taxes be imposed on digital economic activities, and has also recommended that South Africa generate additional revenue from the custom duties that come with cross-border digital economic activities.

“By applying this approach, South Africa would be following recent international trends, which would not only guarantee additional needed revenue but also ensure that all business activities contribute their fair share into the fiscus,” it said.

According to the PBO, online global imports and exports have grown much faster than physical imports have over the past decade. However, this was restricted by the World Trade Organisation (WTO) moratorium, which has been in place since 1998.

“The revenue losses of Sub-Saharan Africa are expected to range between $600-million and $2.6-billion (R10.8-billion and R46.8-billion) annually in potential custom duties due to the WTO moratorium,” the PBO said.

“South Africa is estimated to have lost between $25-million (R475-million) and $37-million (R700-million) in potential custom duties revenue as a result of the WTO Moratorium. Unsurprisingly, South Africa and India have raised concerns about the fiscal impact of the 1998 WTO Moratorium over the years, and the duo submitted a proposal to end the WTO Moratorium in March 2020.”

Picture: Pixabay

Article written by

Lucinda Dordley

Lucinda is a hard news writer who occasionally dabbles in lifestyle writing, and recent journalism graduate. She is a proud intersectional feminist, and is passionate about actively creating a world which is free of discrimination and inequality.